What Is Product Life Cycle?
- Product Life Cycles Explained Product life cycle definition is the process a product goes through after a business introduces it into the market until it becomes unavailable. ...
- Stages There are four product life cycles stages. ...
- Examples Let us look at some product life cycles examples to understand the concept better. ...
- Frequently Asked Questions (FAQs) ...
- Recommended Articles ...
What are the 4 stages of the product life cycle?
The traditional product life cycle consists of 4 stages:
- Introduction
- Growth
- Maturity
- Decline
What is the importance of product life cycle?
The assumptions that are made are:
- Products, in general, have a limited life span. All products will thus end up passing through a product life cycle.
- Each phase of that life cycle presents the business with a set of opportunities and challenges to take advantage of and to overcome.
- Products will require different efforts from design, development, marketing, purchasing, etc. ...
What is product life cycle theory?
The Product Life Cycle Theory is an economic theory that was developed by Raymond Vernon in response to the failure of the Heckscher-Ohlin model to explain the observed pattern of international trade. The theory suggests that early in a product's life-cycle all the parts and labor associated with that product come from the area where it was invented.
What is a product development life cycle?
What is product development life cycle in software? The product life cycle is the process that a product begins with its first introduction, ending with its decline, passing through all rises and falls of the market. In a development life cycle, depending on which phase your product is at, you will determine whether you are going to invest or not.
What is product lifecycle planning?
Product lifecycle management (PLM) is the process of managing a product's lifecycle from inception, through design and manufacturing, to sales, service, and eventually retirement. As a technology, PLM software helps organizations to develop new products and bring them to market.
What is product life cycle examples?
Here are a few product life cycle examples: The home entertainment industry is filled with examples at every stage of the product life cycle. For example, videocassettes are gone from the shelves. DVDs are in the decline stage, and flat-screen smart TVs are in the mature phase.
What are the 5 stages of a product life cycle?
The product life cycle is the progression of a product through 5 distinct stages—development, introduction, growth, maturity, and decline.
What is product life cycle in short?
What is the Product Life Cycle? The product life cycle involves the stages through which a product goes from the time it is introduced in the market till it leaves the market. A product life cycle consists of four stages: introduction, growth, maturity, and decline.
Why is product life cycle important?
The product life-cycle is an important tool for marketers, management and designers alike. It specifies four individual stages of a product's life and offers guidance for developing strategies to make the best use of those stages and promote the overall success of the product in the marketplace.
What are the characteristics of product life cycle?
The life cycle has four stages—introduction, growth, maturity, and decline. While some products may remain in a prolonged maturity state for some time, all products eventually phase out of the market due to several factors including saturation, increased competition, decreased demand, and dropping sales.
What are the 7 steps of product life cycle?
Table of ContentsStage 1: Idea Generation.Stage 2: Idea Screening.Stage 3: Concept Development & Testing.Stage 4: Market Strategy/Business Analysis.Stage 5: Product Development.Stage 6: Deployment.Stage 7: Market Entry/Commercialization.
What is a life life cycle?
life cycle, in biology, the series of changes that the members of a species undergo as they pass from the beginning of a given developmental stage to the inception of that same developmental stage in a subsequent generation.
How do you determine product life cycle?
Look for new products that have never been sold. ... Watch commercials and press releases announcing new products. ... Find products that were recently released which have rapidly increasing sales. ... Look at products that have enjoyed a level sales rate at its peak have reached the maturity stage of the life cycle.More items...
What is introduction in product life cycle?
The introduction stage is when a product is first launched in the marketplace. This is when marketing teams begin building product awareness and reaching out to potential customers. Typically, when a product is introduced, sales are low and demand builds slowly.
What is the product life cycle of Coca Cola?
PLC has 4 stages which include; Introduction stage. Growth stage. Maturity stage.
What are some examples of products?
A product is any item or service you sell to serve a customer's need or want. They can be physical or virtual. Physical products include durable goods (such as cars, furniture, and computers) and nondurable goods (such as food and beverages).
Why is Coca Cola in the maturity stage?
Maturity Stage For example, companies such as Coca-Cola and Clorox advertise their mature products to reinforce the brand with the public.
What is an example of a product in the growth stage?
The Internet is a current example of a product that can be found in the growth phase of its life cycle. The benefits the Internet has provided have resulted in rapid reception in consumer and business markets.
What Is a Product Life Cycle?
The term product life cycle refers to the length of time a product is introduced to consumers into the market until it's removed from the shelves. The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline. This concept is used by management and by marketing professionals as a factor in deciding when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging. The process of strategizing ways to continuously support and maintain a product is called product life cycle management .
What is the life cycle of a product?
The term product life cycle refers to the length of time a product is introduced to consumers into the market until it's removed from the shelves. The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline. This concept is used by management and by marketing professionals as a factor in deciding ...
What happens when a product is successfully introduced into the market?
The product may lose market share and begin its decline. When a product is successfully introduced into the market, demand increases, therefore increasing its popularity. These newer products end up pushing older ones out of the market, effectively replacing them.
Why are products suspended in the mature stage?
Many of the most successful products on earth are suspended in the mature stage for as long as possible, undergoing minor updates and redesigns to keep them differentiated. Examples include Apple computers and iPhones, Ford's best-selling trucks, and Starbucks' coffee—all of which undergo minor changes accompanied by marketing efforts—are designed to keep them feeling unique and special in the eyes of consumers.
How many stages are there in the life cycle of a product?
There are four stages in a product's life cycle—introduction, growth, maturity, and decline.
What pushes older products out of the market?
Newer, more successful products push older ones out of the market.
When a product is successfully introduced into the market, demand increases, therefore increasing its popularity?
When a product is successfully introduced into the market, demand increases, therefore increasing its popularity. These newer products end up pushing older ones out of the market, effectively replacing them. Companies tend to curb their marketing efforts as a new product grows. That's because the cost to produce and market the product drop. When demand for the product wanes, it may be taken off the market completely.
What is product life cycle?
Product life cycles are used by management and marketing professionals to help determine advertising schedules, price points, expansion to new product markets, packaging redesigns, and more. These strategic methods of supporting a product are known as product life cycle management. They can also help determine when newer products are ready to push older ones from the market.
What is the life cycle of a product?
A product life cycle is the length of time from a product first being introduced to consumers until it is removed from the market. A product’s life cycle is usually broken down into four stages; introduction, growth, maturity, and decline.
How does the life cycle of a product affect the consumer?
As the new product becomes established, the marketing efforts lessen and the associated costs of marketing and production drop. As the product moves from maturity to decline , so demand wanes and the product can be removed from the market, possibly to be replaced by a newer alternative.
Why is the life cycle of a product in decline?
Eventually, as competition continues to rise, with other companies seeking to emulate your success with additional product features or lower prices, so the life cycle will go into decline. Decline can also be caused by new innovations that supersede your existing product, such as horse-drawn carriages going out of fashion as the automobile took over.
Why are products in decline?
Many products or brands have gone into decline as consumer needs change or new innovations are introduced. Some industries operate in several stages of the product life cycle simultaneously, such as with televisual entertainment, where flat screen TVs are at the mature phase, on-demand programming is in the growth stage, DVDs are in decline and video cassettes are now largely redundant. Many of the most successful products in the world stay at the mature stage for as long as possible, with small updates and redesigns along with renewed marketing to keep them in the thoughts of consumers, such as with the Apple iPhone.
How long does a product last?
While all products have a life cycle, many of the most successful ones are able to maintain the mature stage of the life cycle for many years before any eventual decline.
How many stages are there in the life cycle of a product?
There are four stages of a product’s life cycle, as follows:
What is the product life cycle?
The underlying principle of the product life cycle is fairly simple – as a product grows old, it tends to become less popular, while the demand for a new and up-to-date product draws more demand that increases quite rapidly once the product gains acceptance after its launch. Most of the companies acknowledge the concept of the product life cycle and the fact that all the products that they deal with have a limited lifespan. Accordingly, these companies make regular investments to either develop a new product or extend the life cycle of an existing product, which would ensure that their businesses continue to grow.
What is product life cycle management?
The process of building strategies to support the market share and popularity of a product is known as the product life cycle management. A strong product lifecycle management can result in better and faster product marketing, maintenance of superior product quality, increased sales opportunities, improved product safety, and lower mistakes & wastage.
How do companies manage their product life cycle?
However, it is important that these companies proactively manage all the products during their lifespan by deploying adequate resources along with effective sales and marketing strategies.
Why is the graph used for building product life cycle useless?
In the case of too many fluctuations in sales data, the graph used for building product life cycle becomes useless as it would fail to provide any meaningful insights.
What is the growth stage of a product?
In the growth stage, the product is gaining acceptance and popularity among consumers. In this stage, the company intends to build the brand stronger. The strategies employed during the growth stage are:
How to revive product demand?
Rejuvenate the product demand by adding some new features and identifying new uses.
What is a product life cycle?
The product life cycle is the length of time from when a product is introduced to the consumer market up until it declines or is no longer being sold. This cycle can be broken up into different stages, including—development, introduction, growth, maturity, saturation, and decline. The life cycle of a product is typically used to determine when it’s appropriate to increase advertising, adjust pricing, explore new markets, redesign packaging and even adjust your messaging.
What is the life cycle of a product?
What is a Product Life Cycle? The life cycle of a product is associated with marketing and management decisions within businesses, and all products go through five primary stages: development, introduction, growth, maturity, and decline. Each stage has its costs, opportunities, and risks, and individual products differ in how long they remain ...
What factors affect the product life cycle?
However, it’s worth noting that there are external factors that can directly influence how well your product performs and how long it sits in a given stage.
Why is product life cycle important?
Understanding the product life cycle is a vital part of managing and growing your business. It can help you devise a more detailed roadmap for your business, make better strategic decisions and even help you create more accurate financial forecasts. If you’ve created a business plan make sure that exploring your market position is part of your regular plan reviews. You’re likely already looking into everything involved in the product life cycle, but it’s well worth taking the time to solidify what the position of your product is on a regular basis.
How does competition affect the product life cycle?
If barriers to entry (number of competitors, expenses, market size, technology) are low the product life cycle is more likely to be short . If they’re higher, making entry more difficult, you’re more likely to see an extended product life cycle.
What is the product development stage?
1. Development. The product development stage is often referred to as “the valley of death.”. At this stage, costs are accumulating with no corresponding revenue. Some products require years and large capital investment to develop and then test their effectiveness. Since risk is high, outside funding sources are limited.
What is the mature stage of a business?
The mature stage is when sales will level off. This doesn’t mean you aren’t still growing, you just won’t see the same level of rapid growth as before. Typically at this point, you will begin to lower prices, offer free additions or make other adjustments to keep your products competitive.
What is the Product Life Cycle?
The product life cycle model breaks down the various stages of a product’s evolution, from its debut to retirement. Each phase comes with its characteristics, demands, and challenges. All products travel through various stages during their existence, and the product life cycle breaks these down into specific phases with distinct characteristics. Although there are many versions and variants, the typical product life cycle consists of the following four periods:
What is the final phase of the product life cycle?
The final phase of the product life cycle is decline. During this period, usage drops off as product demand ebbs. This may be due to the driving motivation for the product fading from importance in the market (and thus a smaller overall market for the product) or a replacement product/technology encroaching and stealing market share. Although some products manage to hold on for some time in this phase and survive on acceptable profit margins, many are eventually “ sunset ” and retired.
What is a Product Manager’s Role in Each Phase?
As a product moves through its life cycle, the daily job description for a product manager also evolves as they work to shepherd the product along.
What is the third phase of product development?
Account management and customer service are of particular importance during this phase, while product development focuses on scalability and extending the product into complimentary/ancillary domains to maintain usage. Keeping up with competitors and developing profitable processes occupy much of the company’s time during this period.
What happens at the end of the life cycle?
When the end of the life cycle, product managers have a few options for squeezing more life out of their products. They can attempt to combat churn with discounted pricing, targeting new, additional markets and attempting to win back former customers, delaying significant shrinkage as long as possible.
What is the role of product management?
But product management plays an integral role in how quickly each product moves through its own life cycle stages.
How long does it take for a product to reach its zenith?
Every product starts at zero, reaches its zenith, and eventually declines, if not wholly ceasing to exist. Progressing along this curve may take months, years, or decades, but no product can escape it altogether.
What is product life cycle management?
Product Lifecycle management refers to managing or handling the commodities or products as it moves through its phases of the product life cycle. The product life cycle stages are- Development and introduction, growth, maturity/ stability, and decline. The handling of the goods refers to manufacturing the goods, along with marketing them. When the business understands at which stage its product is currently present, it can make better decisions for its pricing and promotion, so that it can expand its business and increase its revenue. Hence, the term product lifecycle management is the firm’s approach to the different phases of the product’s manufacturing and development till its ultimate decline. PLM also includes managing all the stages of the product life cycle such as customer segmentation, marketing, and sales, etc. The major benefit of understanding PLM is to shorten the product development time, and knowing when to reduce or ramp up the efforts for manufacturing. Another advantage is that the business would also understand how and when to focus on its marketing efforts.
What are the stages of a product life cycle?
The typical stages of a product’s life are development and introduction, growth, maturity, and stability and decline. At any given time, a product would be in any one of these mentioned stages. The development stage is usually an integral part of the product life cycle. In the development stage, the product features are planned and the basic idea of the product is envisioned by the team which lays the foundation of the product. Once it is built according to the needs of the customer, it is launched in the market, which is the phase of introduction. The company invests a large sum of capital in marketing and sales of the product in the introduction stage. As the popularity of the product increases, the demand for the product increases causing growth in product manufacturing. As the product demand increases, there would come a point where the product matures and becomes stable. At this time, the sales of the product make enough revenue for the company to sustain. When the product does not perform well, the production decreases and the company moves on with other products. In this article, we learn about effective ways to manage the product life cycle.
Why is product lifecycle management important?
The main objective of having effective product lifecycle management is to prepare your organization for growth. It does not matter whether you need to bring new people or expand the product line, you will always have a foundation or an infrastructure to train the new team member rapidly. PLM ensures that the entire company follows similar established processes and makes the product successful in the market. When you take an approach to PLM which consists of detailed steps, the revenue generated from the product would be enhanced drastically. When you follow the steps prescribed, your product development processes will get streamlined and you will have confidence that you are working with validated and clean data.
What is the first step in product development?
The first step in any product development process is to have an objective and goal of why you are developing the product and what purpose it would serve to the customers . Similarly, when you are seeking a product lifecycle management solution, you have to define the reasons why you are taking such a step. You have to define your objectives and goals from the PLM. Some of the common objectives and operational goals include:
What is product lifecycle management?
Product lifecycle management (PLM) refers to the handling of a good as it moves through the typical stages of its product life: development and introduction, growth, maturity/stability, and decline.
When did the concept of a product having stages of life start?
The concept of a product having stages of life (and the need to manage them) arose as early as 1931 . Around 1957, an employee of Booz, Allen and Hamilton, the advertising agency, theorized a five-step life cycle for goods, beginning with the introduction phase, rising through growth and maturity, and eventually hitting saturation and decline.
When did PLM start?
One of the first recorded applications of modern PLM occurred with American Motors Corporation (AMC) in 1985 . Looking for a way to speed up its product development process to better compete against its larger competitors in 1985 —while lacking their larger budgets—AMC decided to emphasize bolstering the product lifecycle of its prime products (particularly Jeeps). Following that strategy, after introducing its compact Jeep Cherokee, the vehicle that launched the modern sport utility vehicle (SUV) market, AMC began development of a new model that eventually debuted as the Jeep Grand Cherokee. 1
What is PLM in marketing?
PLM involves all stages, including the development and manufacturing of a product, to its marketing and customer segmentation.
What was the first part of the quest for faster product development?
The first part in its quest for faster product development was the advent of computer-aided design (CAD) software systems that made engineers more productive. The second part of this effort was the new communication system that allowed conflicts to be resolved faster, as well as reducing costly engineering changes because all drawings and documents were in a central database. 1
What are the benefits of PLM?
PLM's main benefits include shortening product development times, knowing when to ramp up or reduce manufacturing efforts, and how to focus marketing efforts. The first part in its quest for faster product development was computer-aided design (CAD) software system that made engineers more productive.
Can PLM affect a product?
PLM can affect more fundamental elements of a product, too. Even after it reaches maturity, a product can still grow—especially if it is updated or augmented in some way.
What Is Product Life Cycle Management?
Product life cycle management is a comprehensive framework that product companies use to manage a product through the phases of the product life cycle.
How many stages are there in the product life cycle?
There are some variants to this which consist of 5 product life cycle stages or even 6 stages, but since we’re discussing the traditional product life cycle, we’re going to stick to 4 stages.
What is PLM software?
PLM is now synonymous with the PLM software systems that help manage the product life cycle.
Why is product management important?
The product management life cycle helps to synchronize product development to optimize the life of each product in its product portfolio.
What is the introduction phase of a product?
The introduction phase of the traditional product life cycle begins with the actual launch of a product. The effort involved in researching, designing, and building the product is not tackled here. Introducing a product is a highly specialized, expensive affair and typically no one talks about profit. Instead, the focus is on advertising, sales, and distribution.
Why is it important to know the stages of the product life cycle?
Having a deep understanding of the various stages of the product life cycle is important when it comes to developing new products. Knowing the stages helps in computing the feasibility and viability of a new product.
Why is it important to have a pipeline of concurrent products?
Therefore, it is important for companies to have a pipeline of concurrent products to ensure that they maintain or increase levels of revenue and market share.
What Is The Product Life Cycle?
How The Product Life Cycle Work
- Products, like people, have life cycles. The life cycle of a product is broken into four stages—introduction, growth, maturity, and decline. A product begins with an idea, and within the confines of modern business, it isn't likely to go further until it undergoes research and development (R&D) and is found to be feasibleand potentially profitable. At that point, the produ…
Advantages of Product Life Cycle
- The product life cycle better allows marketers and business developers to better understand how each product or brand sits with a company's portfolio. This enables the company to internally shift resources to specific products based on those products positioning within the product life cycle. For example, a company may decide to reallocate market staff time to products entering the intr…
Limitations of Product Life Cycle
- Unfortunately, the product life cycle doesn't pertain to every industry, and it doesn't pertain consistently across all products. Consider popular beverage lines whose primary products have been in the maturity stage for decades, while spin-off or variations of these drinks from the same company fail. The product life cycle may be artificial in industries with legal or trademark restrict…
Product Life Cycle vs. BCG Matrix
- A similar analytical tool to determine the market positioning of a product is the Boston Consulting Group (BCG) Matrix. This four-square table defines products based on their market growth and market share: 1. "Stars" are products with high market growth and high market share. 2. "Cash cows" are products with low market growth and high market share. 3. "Question marks" are prod…
Special Considerations
- Companies that have a good handle on all four stages can increase profitability and maximize their returns. Those that aren't able to may experience an increase in their marketing and production costs, ultimately leading to the limited shelf life for their product(s). Back in 1965, Theodore Levitt, a marketing professor, wrote in the Harvard Business Review that the innovato…
Examples of Product Life Cycles
- Many brandsthat were American icons have dwindled and died. Better management of product life cycles might have saved some of them, or perhaps their time had just come.
The Bottom Line
- Broadly speaking, almost every product sold undergoes the product life cycle. This cycle of market introduction, growth, maturity, and decline may vary from product to product or industry to industry. However, this cycle informs a company of how to best utilize its resources, what the future outlook of their product is, and how to strategically plan for bringing new products to mar…
How Does It Work?
Product Life Cycle Strategy and Management
- Having a properly managed product life cycle strategy can help extend the life cycle of your product in the market. The strategy begins right at the market introduction stage with setting of pricing. Options include ‘price skimming,’ where the initial price is set high and then lowered in order to ‘skim’ consumer groups as the market grows. Alterna...
Examples
- Many products or brands have gone into decline as consumer needs change or new innovations are introduced. Some industries operate in several stages of the product life cycle simultaneously, such as with televisual entertainment, where flat screen TVs are at the mature phase, on-demand programming is in the growth stage, DVDs are in decline and video cassettes are now largely red…
Conclusion
- Understanding how a product’s life cycle works allows companies to work out whether their products are meeting the needs of the target market and, thereby, when they may need to change focus or develop something new. Examining a product in relation to market needs, competition, costs and profits allows a company to pivot their product focus to maintain longevity in the mar…